Decoding the code - China's new General Civil Law Rules: the first step towards a comprehensive civil code

On 15 March 2017, the People's Republic of China General Civil Law Rules (中华人民共和国民法总则) (hereinafter referred to as the "GCLR") were formally adopted at the Fifth Session of the Twelfth National People's Congress. The GCLR will enter into force on 1 October 2017. The GCLR contain a total of 206 articles divided into 11 chapters, setting forth provisions with respect to the basic elements of the civil law system, including:

the basic principles of civil law

subjects

rights

legal acts

liability; and

statute of limitations.

Together these will provide the basic framework for China's civil law system.

The relationship between the GCLR and the clearly overlapping and similarly named 1987 People's Republic of China General Principles of Civil Law (中华人民共和国民法通则) ("GPCL") is somewhat unusual, in that whilst the GCLR clearly overwrites many provisions of the earlier GPCL (and the basic legislative interpretation rule is that the newer legislation at the same level supercedes the older), for the moment the GPCL remain in force. It is not obvious on the face of it as to why the GPCL has not been replaced in its entirety by the GCLR.

Our understanding is that China is now in the process of writing a civil code, which is expected to be in place around 2020. The first step is to issue the GCLR, which will provide the overall framework of the future civil code. The second step is to conform, reconcile and systematize the other constituent elements of the civil code, including laws, regulations and other rules regulating property rights, contract, tort and so forth. In order to allow more flexibility when making amendments to such legislation which may have been based on provisions of the GPCL, both the GCLR and GPCL will remain valid for an interim period presumably until the civil code takes effect in 2020.

One thing about the GPCL is clear: it contains many new provisions regulating areas that were not previously regulated or expanding on those areas which were not regulated in detail under the GPCL. These areas are analysed and highlighted in the attached client note. The GCLR is, however, silent on any specific punishments for breach: in many ways it is similar to the scheme under the GPCL, in that it only provides the scheme of ways in which parties may assume civil liability for breach.